SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1995
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____ to _____
Commission file number: 0-16845
Fidelity Leasing Income Fund IV, L.P.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2441780
_______________________________________________________________________________
(State of organization) (I.R.S. Employer Identification No.)
250 King of Prussia Road, Radnor, PA 19087
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(610) 964-7102
_______________________________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the regis-
trant was required to file such reports), and (2) has been subject to such fil-
ing requirements for the past 90 days.
Yes __X__ No _____
Page 1 of 11
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND IV, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
September 30, December 31,
1995 1994
___________ ____________
Cash and cash equivalents $ 939,721 $2,456,685
Accounts receivable 102,133 124,635
Interest receivable 321 8,702
Due from related parties 4,509 12,083
Equipment under operating leases
(net of accumulated depreciation
of $6,954,675 and $8,719,350,
respectively) 2,158,869 1,781,057
Equipment held for sale or lease 9,229 35,383
__________ __________
Total assets $3,214,782 $4,418,545
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 134,028 $ 165,711
Accounts payable and
accrued expenses 16,883 54,043
Due to related parties 1,312 3,553
__________ __________
Total liabilities 152,223 223,307
Partners' capital 3,062,559 4,195,238
__________ __________
Total liabilities and
partners' capital $3,214,782 $4,418,545
========== ==========
The accompanying notes are an integral part of these financial statements.
2
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
____ ____ ____ ____
Income:
Rentals $515,005 $574,541 $1,646,778 $1,765,059
Interest 13,226 31,532 60,505 92,644
Gain on sale of equipment,
net 45,075 60,243 145,618 126,443
Other 401 33,901 13,074 41,336
________ ________ __________ __________
573,707 700,217 1,865,975 2,025,482
________ ________ __________ __________
Expenses:
Depreciation 279,179 372,779 970,061 1,094,392
Write-down of equipment
to net realizable value - - 87,796 -
General and administrative 18,885 18,213 83,383 77,506
General and administrative
to related party 13,435 28,722 56,940 70,576
Management fee to related
party 30,396 33,969 97,295 103,703
________ ________ __________ __________
341,895 453,683 1,295,475 1,346,177
________ ________ __________ __________
Net income $231,812 $246,534 $ 570,500 $ 679,305
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 17.80 $ 15.91 $ 42.45 $ 41.58
======== ======== ========== ==========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 11,889 15,139 12,700 15,929
======== ======== ========== ==========
The accompanying notes are an integral part of these financial statements.
3
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the nine months ended September 30, 1995
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1995 $ 6,635 42,565 $4,188,603 $4,195,238
Redemptions - (1,730) (17,453) (17,453)
Cash distributions (16,857) - (1,668,869) (1,685,726)
Net income 31,361 - 539,139 570,500
_______ ______ __________ __________
Balance, September 30, 1995 $21,139 40,835 $3,041,420 $3,062,559
======= ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1995 and 1994
(Unaudited)
1995 1994
____ ____
Cash flows from operating activities:
Net income $ 570,500 $ 679,305
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 970,061 1,094,392
Write-down of equipment to net
realizable value 87,796 -
Gain on sale of equipment, net (145,618) (126,443)
(Increase) decrease in accounts receivable 22,502 (15,810)
(Increase) decrease in due from related
parties 7,574 381,306
Increase (decrease) in lease rents paid
in advance (31,683) (885)
Increase (decrease) in accounts payable and
accrued expenses (37,160) (69,771)
Increase (decrease) in due to related parties (2,241) (82,421)
Increase (decrease) in other, net 8,381 6,150
__________ __________
879,612 1,186,518
__________ __________
Net cash provided by operating activities 1,450,112 1,865,823
__________ __________
Cash flows from investing activities:
Acquisition of equipment (1,533,346) (1,224,349)
Maturity of investment securities held
to maturity - 251,932
Proceeds from sale of equipment 269,449 303,358
__________ __________
Net cash used in investing activities (1,263,897) (669,059)
__________ __________
Cash flows from financing activities:
Distributions (1,685,726) (1,992,377)
Redemptions of capital (17,453) (88,814)
__________ __________
Net cash used in financing activities (1,703,179) (2,081,191)
__________ __________
Decrease in cash and cash equivalents (1,516,964) (884,427)
Cash and cash equivalents, beginning
of period 2,456,685 3,031,659
__________ __________
Cash and cash equivalents, end of period $ 939,721 $2,147,232
========== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
The accompanying unaudited condensed financial statements have been prepared
by the Fund in accordance with generally accepted accounting principles,
pursuant to the rules and regulations of the Securities and Exchange Commis-
sion. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Certain amounts on the 1994 financial statements have been
reclassified to conform to the presentation adopted in 1995.
1. ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH DISTRIBUTIONS
Beginning July 1, 1995, cash distributions, if any, are made quarterly as
follows: 96.5% to the Limited Partners and 3.5% to the General Partner,
until the Limited Partners have received an amount equal to the purchase
price of their Units, plus a 10% compounded Priority Return (an amount
equal to 10% compounded annually on the portion of the purchase price, not
previously distributed); thereafter 90% to the Limited Partners and 10% to
the General Partner. For the period from January 1, 1992 through June 30,
1995, cash distributions were allocated 99% to the Limited Partners and 1%
to the General Partner.
2. EQUIPMENT LEASED
Equipment on lease consists primarily of computer peripheral equipment
under operating leases. A majority of the equipment was manufactured by
IBM. The lessees have agreements with the manufacturer to provide main-
tenance for the leased equipment. The Fund's operating leases are for
initial lease terms of 15 to 60 months. Generally, operating leases will
not recover all of the undepreciated cost and related expenses of its
rental equipment during the initial lease terms and the Fund is prepared to
remarket the equipment in future years. Fund policy is to review quarterly
the expected economic life of its rental equipment in order to determine
the recoverability of its undepreciated cost. Recent and anticipated
technological developments affecting computer equipment and competitive
factors in the marketplace are considered among other things, as part of
this review. In accordance with Generally Accepted Accounting Principles,
the Fund writes down its rental equipment to its estimated net realizable
value when the amounts are reasonably estimated and only recognizes gains
upon actual sale of its rental equipment. As a result, $87,796 and $-0-
was charged to write-down of equipment to net realizable value for the
nine months ended September 30, 1995 and 1994, respectively. The General
Partner believes, after analyzing the current equipment portfolio, that
there are impending gains to be recognized upon the sale of certain of its
equipment in future years. Any future losses are dependent upon unantici-
pated technological developments affecting the computer equipment industry
in subsequent years.
6
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating leases as of September 30, 1995 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1995 $ 451,000
1996 1,197,000
1997 693,000
1998 89,000
__________
$2,430,000
==========
3. RELATED PARTY TRANSACTIONS
The General Partner receives 6% or 3% of gross rental payments from equip-
ment under operating leases and full pay-out leases, respectively, for
administrative and management services performed on behalf of the Fund.
Full pay-out leases are noncancellable leases with terms in excess of 42
months and for which rental payments during the initial term are at least
sufficient to recover the purchase price of the equipment, including acqui-
sition fees.
Additionally, the General Partner and its affiliates are reimbursed by the
Fund for certain costs of services and materials used by or for the Fund
except those items covered by the above-mentioned fees. Following is a
summary of fees and costs of services and materials charged by the General
Partner or its affiliates during the three and nine months ended September
30, 1995 and 1994:
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
____ ____ ____ ____
Management fee $30,396 $33,969 $97,295 $103,703
Reimbursable costs 13,435 28,722 56,940 70,576
Amounts due from related parties at September 30, 1995 and December 31,
1994 represent monies due the Fund from the General Partner and/or other
affiliated funds for rentals and sales proceeds collected and not yet re-
mitted the Fund.
Amounts due to related parties at September 30, 1995 and December 31, 1994
represent monies due to the General Partner for the fees and costs men-
tioned above, as well as, rentals and sales proceeds collected by the Fund
on behalf of other affiliated funds.
4. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared and paid a cash distribution of $575,434 in
November 1995 for the three months ended September 30, 1995, to all
admitted partners as of September 30, 1995.
7
FIDELITY LEASING INCOME FUND IV, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Fidelity Leasing Income Fund IV, L.P. had revenues of $573,707 and
$700,217 for the three months ended September 30, 1995 and 1994, respectively,
and $1,865,975 and $2,025,482 for the nine months ended September 30, 1995 and
1994, respectively. Rental income from the leasing of computer peripheral
equipment accounted for 90% and 82% of total revenues for the third quarter of
1995 and 1994, respectively, and 88% and 87% of total revenues for the first
nine months of 1995 and 1994, respectively. The decrease in revenues is
primarily attributable to a decrease in rental income and partially attribu-
table to a decrease in both interest income and other income. In 1995, rental
income decreased by approximately $578,000 because of equipment which came off
lease and was re-leased at lower rental rates or sold. This decrease, however,
was offset by approximately $460,000 of rents generated from equipment pur-
chases made since the third quarter of 1994. Additionally, interest income
earned by the Fund was lower in 1995 compared to 1994 because of lower cash
balances available for investment by the Fund. Furthermore, other income
was $13,074 in 1995 as compared to $41,336 in 1994 reflecting a decrease in
late fees recognized on past due rents which are included in other income.
However, the Fund recognized a net gain on sale of equipment of $145,618 and
$126,443 for the nine months ended September 30, 1995 and 1994, respectively,
which partially offset the decreases in revenues in 1995.
Expenses were $341,895 and $453,683 during the three months ended September
30, 1995 and 1994, respectively and $1,295,475 and $1,346,177 for the nine
months ended September 30, 1995 and 1994, respectively. Depreciation expense
comprised 82% of total expenses during the third quarter of both 1995 and 1994,
and 75% and 81% for the first nine months of 1995 and 1994, respectively. The
decrease in expenses is primarily caused by the decrease in depreciation
expense because of equipment which came off lease or was sold since the third
quarter of 1994. The decrease in expenses, however, was offset by the increase
in the write-down of equipment to net realizable value. Based upon the
quarterly review of the recoverability of the undepreciated cost of rental
equipment,$87,796 was charged to operations to write down equipment to its net
realizable value during the nine months ended September 30, 1995 as compared to
$-0- for the nine months ended September 30, 1994. The General Partner
believes, after analyzing the current equipment portfolio, that there are
impending gains to be recognized upon the sale of certain of its equipment in
future years. Any future losses are dependent upon unanticipated technological
developments affecting the computer equipment industry in subsequent years.
For the three months ended September 30, 1995 and 1994, the Fund had net
income of $231,812 and $246,534, respectively. For the nine months ended
September 30, 1995 and 1994, the Fund had net income of $570,500 and $679,305,
respectively. The earnings per equivalent limited partnership unit, after
earnings allocated to the General Partner were $17.80 and $15.91 based on a
weighted average number of equivalent limited partnership units outstanding of
11,889 and 15,139 for the quarter ended September 30, 1995 and 1994, respec-
tively. The earnings per equivalent limited partnership unit, after earnings
allocated to the General Partner were $42.45 and $41.58 based on a weighted
average number of equivalent limited partnership units outstanding of 12,700
and 15,929 for the nine months ended September 30, 1995 and 1994, respectively.
The Fund generated funds from operations of $465,916 and $559,070, for the
purpose of determining cash available for distribution, during the third
quarter of 1995 and 1994, respectively and distributed $575,434 and $564,050 to
partners in November 1995 and 1994, respectively. For the nine months ended
8
FIDELITY LEASING INCOME FUND IV, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (Continued)
September 30, 1995 and 1994, the Fund generated funds from operations of
$1,482,739 and $1,647,254 and distributed $1,122,148 and $1,131,006 to partners
during the nine months ended September 30, 1995 and 1994, respectively and
$575,434 and $564,050 to partners in November 1995 and 1994, respectively. The
distributions for the three and nine months ended September 30, 1995, include
$109,518 and $214,843, respectively of sales proceeds and cash available from
previous quarters which was not distributed.
ANALYSIS OF FINANCIAL CONDITION
The Fund continues to purchase computer peripheral equipment, with sales
proceeds and cash available from operations which was not distributed to
partners in previous periods. The Fund purchased $1,533,346 and $1,224,349 of
equipment during the nine months ended September 30, 1995 and 1994,
respectively.
The cash position of the Fund is reviewed daily and cash is invested on a
short-term basis.
The Fund's cash from operations is expected to continue to be adequate to
cover all operating expenses and contingencies during the next twelve month
period.
9
Part II: Other Information
FIDELITY LEASING INCOME FUND IV, L.P.
September 30, 1995
Item 1. Legal Proceedings: Inapplicable.
Item 2. Changes in Securities: Inapplicable.
Item 3. Defaults Upon Senior Securities: Inapplicable.
Item 4. Submission of Matters to a Vote of Securities Holders: Inapplicable.
Item 5. Other Information: Inapplicable.
Item 6. Exhibits and Reports on Form 8-K:
a) Exhibits: EX-27
b) Reports on Form 8-K: A report on Form 8-K was filed with the
Securities and Exchange Commission on October 12, 1995 reporting
under Item 1.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
FIDELITY LEASING INCOME FUND IV, L.P.
11-13-95 By: P. Donald Mooney
________ _____________________________
Date P. Donald Mooney
President of
Fidelity Leasing Corporation
(Principal Operating Officer)
11-13-95 By: Marianne T. Schuster
________ _____________________________
Date Marianne T. Schuster
Vice President of
Fidelity Leasing Corporation
(Principal Financial Officer)
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
FIDELITY LEASING INCOME FUND IV, L.P.
_______ _____________________________
Date P. Donald Mooney
President of
Fidelity Leasing Corporation
(Principal Operating Officer)
_______ _____________________________
Date Marianne T. Schuster
Vice President of
Fidelity Leasing Corporation
(Principal Financial Officer)
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 939,721
<SECURITIES> 0
<RECEIVABLES> 106,963
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,046,684
<PP&E> 9,122,773
<DEPRECIATION> 6,954,675
<TOTAL-ASSETS> 3,214,782
<CURRENT-LIABILITIES> 152,223
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,062,559
<TOTAL-LIABILITY-AND-EQUITY> 3,214,782
<SALES> 1,646,778
<TOTAL-REVENUES> 1,865,975
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,295,475
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 570,500
<INCOME-TAX> 0
<INCOME-CONTINUING> 570,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 570,500
<EPS-PRIMARY> 42.45
<EPS-DILUTED> 42.45
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